Stablecoins are increasingly gaining traction and could potentially rival credit and debit cards, according to a payments expert from the Atlanta Federal Reserve.
A decade after Tether first made headlines, the total value of all stablecoins in circulation has surpassed $200 billion, which is comparable to the gross domestic product of countries like New Zealand and Greece.
In a blog post, Chris Colson from the Atlanta Fed highlights that stablecoins have evolved beyond their initial role as a niche tool for cryptocurrency traders looking to avoid volatile price fluctuations. They are now being accepted by retailers such as Overstock, Chipotle, Whole Foods, and GameStop, although their current impact remains limited. Payment giant Stripe has recently allowed merchants to accept USD Coin, while Travala enables users to book travel services using USDC or USDT. Additionally, Bitrefill offers customers the option to shop at major retailers like Amazon, Walmart, and Starbucks using gift cards purchased with stablecoins, even if those retailers don’t directly accept digital currencies.
Despite some concerns regarding the stability of the assets that back stablecoins, regulatory uncertainties, and security vulnerabilities, Colson believes that the future of stablecoins as a viable payment method is still in development. He notes that as digital assets become more widely accepted, their adoption could potentially rise and compete with traditional payment methods. While it’s challenging to determine if stablecoins will achieve universal acceptance, he asserts that the groundwork for their future is being laid.